Merchandising and Sales

If you're thinking of starting a retail business, two prominent terms you'll likely come across are sales and merchandising. Both functions are part of the marketing mix, which includes product, pricing, promotion and place, also known as channels of distribution. While the two functions are closely related, there are some key differences to be aware of.

Merchandising

Merchandising is the process of presenting products for sale in a retail environment in ways that influence shoppers' buying decisions. This includes determining the optimal shelf location for each product, building eye-catching displays that attract potential buyers, and using signage to provide pricing and other product information. Merchandising also involves the selection of the proper product mix to carry in the store. Special pricing and promotions are another part of the merchandising process.

Sales

Sales occur when the consumer actually selects the product and completes the purchasing transaction. In a retail environment, stores often employ salespeople to service customers and to facilitate the sales process. Retail salespeople help implement the store's merchandising program by performing tasks such as executing current sales promotions. In many stores, salespeople also perform merchandising functions like building displays and arranging products on shelves to conform to predetermined layouts called planograms.

Relationship

Although sales and merchandising are two different functions, they are closely related. Effective merchandising leads to sales, even without the aid of a salesperson, as it induces customers to make purchases. For example, a prominently displayed mannequin attractively adorned in the latest fashions can entice customers to try on and possibly purchase the clothing. The technique of cross-merchandising, where two compatible items are displayed together, can lead to additional purchases.

Skill Differences

While workers in a retail environment may be required to perform sales and merchandising functions, there are some differences in the skills needed for each. The sales function requires strong verbal presentation skills to persuade customers to make a purchase, as well as customer service skills. Merchandising typically requires more creative skills, such as the ability to come up with ideas for interesting displays and to make merchandise appear as attractive as possible.